My Sense Of Uncertainty Is On The Rise

Since no one is paying me to make heroic assumptions or guesses, I am not going to make any. I
say this because I do not know how the US economy and its various markets are going to fare once
QE 2 ends on Jun. 30. If private sector credit demand were lifting off substantially now, I doubt I
would have much concern. But progress with the flow of credit has been narrow and tentative, so
I will probably wait a couple of months more to see how well it behaves.

The title of the post refers to my sense of uncertainty, because I am far from sure the broad range of
investors, including some good ones, shares it. And that's because of my unusual way of delineating
monetary liquidity from credit driven liquidity. Experience shows that economic expansion will
tend to falter once the Fed ceases adding liquidity to the system if the credit markets do not pick up
the slack in hefty fashion.

In the interim, I may place long positions only in deeply sold out markets and the occasional short
position in exaggeratedly overbought or overvalued markets. Thus, I have made four round trips
in and out of DZZ -- a gold short -- since Oct. '10 for a gain of 27% after execution costs. But
the short side has been the rarity for me and the DZZ positions were small.

I plan to keep right on posting, but I did want to get my sense of uncertainty and forbearance out in
the open to alert you of an issue and so I do not have repeat it each time out.